Chinese battery manufacturers are increasing their share with less expensive LFP batteries in the global EV battery market, where the ratio of NCM batteries is currently 70 percent or so. The ratio of LFP batteries is estimated to increase from 10 percent to 30 percent from 2015 to 2030 and the ratio of NCM batteries, main products of South Korean EV battery suppliers, is estimated to decrease from 70 percent to 30 percent in that period.

According to the South Korean suppliers, LFP batteries manufactured by the Chinese companies have their own limitations in terms of weight and driving range and, as such, their increase in market share cannot but be limited. However, the popularity of LFP batteries is continuing to increase in the market where cost reduction is becoming increasingly important.

Tesla is currently discussing a partnership with EVE Energy, one of leading Chinese LFP battery manufacturers. CATL, another Chinese company, is already supplying batteries of the same type to Tesla.

Lithium batteries for use in EVs can be broadly divided into LFP and NCM. The former is more stable, less likely to explode and lower in energy density and provides a maximum driving range of 100 km to 300 km. The latter, which provides a maximum driving range of 400 km to 500 km, is more expensive due to its rare non-ferrous metal components.

“It is true that LFP batteries make up a certain portion of the market based on their price competitiveness,” said one of the South Korean suppliers, adding, “However, NCM batteries are improving in terms of energy density and production cost alike and they will remain the mainstream in the end.”